Social Security touches nearly every American’s life, yet it remains one of the most misunderstood programs in our country. Despite paying into the system for decades, many people approach retirement with outdated information, half-truths, or complete misconceptions about how their benefits actually work. These myths aren’t just harmless misunderstandings; they can cost you thousands of dollars in lifetime benefits.
With Social Security providing the majority of family income for 2 in 5 people ages 65 and older, getting the facts right becomes critical for your financial well-being. Whether you’re decades away from retirement or already collecting benefits, separating truth from fiction can help you make smarter decisions about when to claim, how much to expect, and how to coordinate benefits with other retirement income sources.
Myth 1: Social Security Is Going Bankrupt
The Reality of Program Funding
One of the most persistent myths about Social Security is that it’s headed for complete collapse. This fear stems from legitimate concerns about the program’s trust fund, but the reality is far less dramatic than many headlines suggest.
Social Security operates primarily as a pay-as-you-go system funded by current workers’ payroll taxes. Even if the trust fund were completely depleted by 2034 as projected, the program would still be able to pay about 81% of scheduled benefits from ongoing payroll tax collections. While benefit reductions would be problematic, the program wouldn’t simply disappear.
Political and Economic Realities
History shows that Congress has consistently acted to preserve Social Security when faced with funding challenges. The program remains incredibly popular across political lines, making complete elimination politically unrealistic. More likely scenarios involve modest adjustments to taxes, benefits, or retirement ages to ensure long-term sustainability.
Myth 2: You Must Claim Benefits at Age 62
Understanding Your Claiming Options
Many people believe they have no choice but to start Social Security at the earliest possible age of 62. This myth can be costly because claiming early results in permanently reduced benefits for life.
Your full retirement age (FRA) depends on when you were born, ranging from 66 to 67 for most current workers. Claiming at 62 instead of waiting until your FRA reduces your monthly benefit by 25-30%. Conversely, delaying benefits until age 70 can increase your monthly payment by up to 32% above your FRA amount.
Strategic Claiming Decisions
The decision of when to claim Social Security should be based on your health, financial needs, and overall retirement strategy—not on misconceptions about required claiming ages. For many people, waiting beyond 62 results in higher lifetime benefit totals, especially if they live to average life expectancy or beyond.
Myth 3: Working While Collecting Benefits Eliminates Them
The Earnings Test Explained
Another common misconception is that working while collecting Social Security benefits means you lose those benefits entirely. The truth is more nuanced and often more favorable than people think.
If you’re under full retirement age and working while collecting benefits, the Social Security Administration (SSA) reduces benefits by $1 for every $2 earned above $23,400 in 2025. However, these aren’t permanent losses; once you reach full retirement age, your monthly benefit is recalculated to account for the months when benefits were withheld.
In the year you will reach your FRA, the SSA reduces benefits by $1 for every $3 earned above $62,160 prior to reaching your FRA..
After Full Retirement Age
Once you reach your FRA, there’s no limit on how much you can earn while collecting Social Security. You can work full-time, part-time, or start a business without any reduction in benefits. This flexibility allows many retirees to transition gradually into full retirement while building additional savings.
Myth 4: Social Security Benefits Are Always Tax-Free
Tax Implications Many Miss
Many people assume Social Security benefits are completely tax-free, but this isn’t always the case. Depending on your total income in retirement, up to 85% of your Social Security benefits could be subject to federal income tax.
The taxation depends on your “combined income,” which includes your adjusted gross income, nontaxable interest, and half of your Social Security benefits. If this combined income exceeds certain thresholds ($25,000 for individuals, $32,000 for couples), a portion of your benefits becomes taxable.
Planning for Tax Efficiency
Understanding the tax implications of Social Security helps with retirement tax planning. Strategies like managing withdrawals from different account types or timing Roth conversions can help minimize the tax impact on your Social Security benefits.
Myth 5: Your Benefits Are Set in Stone
How Benefits Can Change
Some people believe their Social Security benefit amount is fixed once they start receiving payments, but benefits can actually increase in several ways. Annual cost-of-living adjustments (COLAs) help benefits keep pace with inflation, though these adjustments aren’t guaranteed every year.
Continuing to work after claiming benefits can also increase your payments. Social Security calculates benefits based on your highest 35 years of earnings, so additional high-earning years can replace lower-earning years in the calculation, resulting in higher monthly benefits.
Correction Opportunities
If you discover errors in your Social Security earnings record, you can request corrections that might increase your benefits. Regularly reviewing your Social Security statement helps ensure your earnings history is accurate and complete.
Myth 6: Divorced Spouses Can’t Claim Benefits
Spousal Benefits After Divorce
Many divorced individuals don’t realize they may be entitled to Social Security benefits based on their ex-spouse’s earnings record. If you were married for at least 10 years and meet certain other conditions, you can claim spousal benefits even if your ex-spouse has remarried.
These divorced spousal benefits can equal up to 50% of your ex-spouse’s full retirement age benefit, and claiming them doesn’t reduce your ex-spouse’s benefits. You can receive whichever is higher: benefits based on your own work record or spousal benefits based on your ex-spouse’s record.
Survivor Benefits for Ex-Spouses
Divorced individuals may also be eligible for survivor benefits if their ex-spouse dies, potentially receiving up to 100% of the deceased ex-spouse’s benefit amount. These rules provide important financial protection that many divorced individuals overlook.
Myth 7: You Need 35 Years of Work to Qualify
Minimum Qualification Requirements
While Social Security uses your highest 35 years of earnings to calculate benefits, you don’t need 35 years of work to qualify for benefits. You need 40 “credits” or roughly 10 years of work to qualify for retirement benefits.
If you have fewer than 35 years of earnings, Social Security simply counts the missing years as zeros in the benefit calculation. While this reduces your benefit amount, it doesn’t disqualify you from receiving Social Security.
Maximizing Benefits with Fewer Years
People with shorter work histories can still optimize their benefits by working during their highest-earning potential years and ensuring their earnings record is accurate. Every additional year of work can potentially replace a zero year in the calculation.
Making Informed Decisions
Get Accurate Information
The best way to avoid costly mistakes is to get information directly from official sources. Create an account at ssa.gov to access your Social Security statement, use their benefit calculators, and review current rules and regulations.
Avoid making Social Security decisions based on rumors, outdated information, or general advice that might not apply to your specific situation. The program’s complexity means that individual circumstances can affect optimal claiming strategies.
Work With Us
Social Security myths persist because the program is complex, and misinformation spreads easily among friends, family, and even some financial websites. But your Social Security benefits are too important to your retirement security to base decisions on misconceptions. Understanding the real rules around claiming ages, working while collecting benefits, taxation, and eligibility requirements can help you maximize your lifetime benefits and avoid costly mistakes that can’t be undone.
At Brogan Financial, we understand that Social Security planning goes beyond just knowing the rules—it requires integrating your benefits strategically with your overall retirement plan. Our team stays current on Social Security regulations and can help you develop a claiming strategy that maximizes your benefits while supporting your broader financial goals. Whether you’re planning for retirement or already collecting benefits, we can help you make informed decisions based on facts, not myths. Schedule a consultation with Brogan Financial to discuss your Social Security strategy. Also, be sure to catch Jim Brogan’s expert insights on retirement and financial planning topics by listening to More Living with Jim Brogan every Saturday morning at 9 AM on 98.7 FM WOKI, where he addresses common retirement concerns and provides practical guidance for East Tennessee listeners.
